TRAVERSE CITY — Jacobs, the company that runs the Traverse City Regional Wastewater Treatment Plant, wants a 10-year contract renewal.
City Manager Marty Colburn said both he and city Municipal Utilities Director Art Krueger recommend sticking with Jacobs. He told city commissioners as much at a study session Monday, and as the city enters its last year of its five-year agreement with the company.
But commissioners wanted more information before they could agree, especially to a longer-term contract.
Commissioner Tim Werner said Colburn listed a number of pros for going with Jacobs again — 32 years of experience in Traverse City, a large company with a “deep bench” and more — but noted Colburn never listed any cons.
“It is a very difficult decision when we as a city have had a relationship for so many years, there’s a lot of value to that so how do we justify going out to an RFP,” Werner said, referring to a request for proposals.
But seeking bids is something the city needs to do periodically, and if this isn’t one of those times, commissioners need to be able to justify why, Werner said.
City leaders also wanted to review information Jacobs Regional Director of Operations Kevin Dahl presented as he made the case for a new agreement. Dahl said the city contracted with Jacobs predecessor CH2M Hill in the early 1990s following a competitive bidding process. The city sought bids for the contract again in 2012, then renewed the agreement in 2016.
The company designed and built the membrane filtration system currently in place in 2004, and replaced the eight membrane trains between 2017 and 2020, Dahl said.
Commissioners recently approved an amendment to the contract with Jacobs, upping its annual base fee to the company 1.6 percent to $2,837,858.
Jacobs operates the plant well within the limits established in its discharge permits, and during a 12-month period ending mid-2020, the plant treated 2.1 billion gallons of wastewater, Dahl said.
Now, the plant needs major upgrades, including a primary header that routes inflow from one preliminary treatment stage to another, as previously reported. Other components upstream and downstream from the primary header need replacing as well, with the project list totaling more than $14 million.
Switching operators during those upgrades risks losing the continuity Jacobs brings, Dahl said — he’s been at the plant for 22 years, he added.
“You want to protect your assets during major construction, so we have the experience to help you through that phase,” he said.
Plus, Jacobs would throw in some more services if the city were to agree to a longer-term contract, Dahl said. Those included tasks like studying the installation of solar panels at the plant at an estimated $20,000 value, to upgrading some blowers for the aeration tank at around $250,000.
Those services are one item commissioners wanted to learn more about.
Commissioner Brian McGillivary said a 10-year contract needs an escape clause in case the agreement doesn’t work out — say, if Jacobs merged and the successor company changed significantly.
He also expected the city to seek bids before considering a contract of that length.
The scope-of-work study required for that process could cost $100,000 to $200,000, Colburn said. It’s money the city could spend to arrive at the same answer, especially since there are few companies of Jacobs’ scale that could bid. And two of them — Suez and Veolia — recently merged.
Commissioner Christie Minervini said she would be willing to consider a shorter contract without the added services Jacobs offered if other commissioners found that agreeable.
“I certainly see the value in them and would support a 10-year contract, but $100,000 to $200,000 for preparing an RFP that will likely come back to where we are right now, that’s a chunk of change, and I feel like we really need to be very careful about how we’re spending our money,” she said.
The current agreement expires in June 2022, documents show. Colburn told commissioners Monday’s discussion was a good first step as he sought feedback, and to bring the issue to the table.